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Eric 2099

The Termination of the Paramount Decrees

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A federal judge has given the green light to Justice Department to terminate the 71-year-old consent decrees that have restricted major studio control over the exhibition process.


The lifting of the decrees will clear the way for studios to once again take significant ownership of theater chains, now in dire straits because of the pandemic. But more importantly for the industry, the elimination of the decrees means that studios and exhibitors will be allowed to engage in a host of business practices that have been prohibited since the late 1940s.


“Because changes in antitrust law and administration have diminished the importance of the Decrees’ restrictions, while still providing protections that will keep the probability of future violations low, the Court finds that termination of the Decrees is in the public interest,” wrote U.S. District Judge Analisa Torres in a ruling issued on Friday. Read it here.


Under the plan to terminate the decrees, restrictions on block booking and circuit dealing will remain in place over a two-year sunset period. Block booking is the practice in which theaters have to take a package of movies in one license. Circuit dealing is the practice of demanding a single license that covers all theaters in a circuit.


The judge agreed with the Justice Department’s opinion that the decrees, which had a major role in forcing the end of the studio system in Hollywood’s golden age, were outdated in a time of technological change. Torres wrote that “seventy years of technological innovation, new competitors and business models, and shifting consumer demand have fundamentally changed the industry.”


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Just now, filmlover said:

I wonder if Netflix will buy a bunch of theaters now. They're already likely to strike a deal with a chain after the AMC/Universal deal so that their more mainstream-friendly projects can get some number of weeks of wide theatrical play.

I mean they could before. They weren't a part of the decrees (because they didn't even exist when they were created).

Edited by lorddemaxus
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Ooooooh shiiiit.  The film historian in me is definitely freaking out. 

Terrible and exciting news at the same time.


I have so many thoughts. RIP Independent Film. This is terrible. But is this what we need to save the theatrical experience? Are we gonna get subscriptions finally? Will international films never play again? Are they going to package films like they use to and will the mid-budget film come back? Is that just the ends of days?


And for those not really familiar with Paramount Decrees, this is a video:



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1 hour ago, charlie Jatinder said:

Funny enough, an exhibitor friend of mine was stating this today that Disney releasing Mulan directly in a platform they own is in spirit against Paramount decree.


And at end of day, the decree is terminated.

This was my first issue with the : “seventy years of technological innovation, new competitors and business models


How much of the competition (TV/Streaming/etc...) do the majors studio (or those who own them) have a hand on them ?


That could be true:

Because changes in antitrust law and administration have diminished the importance of the Decrees’ restrictions, while still providing protections that will keep the probability of future violations low, the Court finds that termination of the Decrees is in the public interest


But considering the very next sentence talk about a 2 year's extension for 2 of the majors reason of the paramount decree do not inspire any confidence to be the case, that and the fact that never before the world has seen a monopole like the current google/facebook has on digital ads revenues and seem to not go against the antitrust law.

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More I think about it, I'm honestly not sure any of the studios will buy out a theater chain or whatever anytime soon. All the studios are dealing with losses at this point and I don't think buying something that's already filled with debt will make these situations better. I don't know if that will make theaters dunzo or not tho.

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A court ruling that dropped today allowing movie studios to buy theaters (whether or not they want to — and they probably don’t) is the latest snub to an industry that’s been rattled by change for years, in particular since March and COVID-19.


Exhibition hasn’t been this pressured in a century. When the 1918 Spanish Flu shuttered theaters, many permanently, studios saw an opportunity and snapped them up, ruling the business until the Paramount Decrees in 1948 broke them up. More than 70 years later, it’s no surprise the law is toast. The landscape is very different and a handful of Hollywood majors including Disney and new royalty like Netflix and Amazon were exempt from it anyway.


But it’s ironic that the ruling – by U.S. District Judge Analisa Torres of the Southern District of New York — hit as the nation endures another massive health crisis that’s squeezing exhibition. PVOD is arguably tipping the balance toward studios as Wall Street and big credit ratings agencies struggle to assess milestones like AMC’s deal with Universal and Disney’s decision to release Mulan directly to Disney+.


What’s clear is that this time around studios are not sweeping in to buy the distressed assets. Sources tell Deadline that major movie studios have no plans to get in the exhibition. With their focus on streaming – including big streaming-focused restructurings this week alone at NBCUniversal and Warner Bros — they prefer to spend billions building up their own services than worrying about the local staffing, leases, property taxes and city ordinances that come with running a theater. Also, let’s not forget that many have already been there and done that — i.e. Warner Bros. with cinemas it used to own abroad, and Sony with Loews in the mid-1990s.


At least one big chain, AMC Entertainment, may consider its own asset sales if things continue to go south, its CEO said yesterday.


Netflix and Amazon are the lone strategic buyers rumored on and off to be interested in buying a chain. Netflix bought the Egyptian in Hollywood and the Paris in New York City. But those were largely vanity plays. Sources at Netflix have insisted the streamer would never jump into the the circuit business because it’s great at what it does and doesn’t need that exposure to an ancillary risk.


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12 hours ago, CloneWars said:

I honestly think this might be necessary with the way things are today. Does anyone really think Regal or AMC can survive another 6 months to a year of Covid without a vaccine?

I don't think studios are anxious to spend BIllions on buying up theaters, frankly.

And with their losses from the virus, they might not have the cash to do so even if they wanted to.

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